Murchison United Nl Share Discussion Threads

[skipster] 01/9/2004 10:00

1st June:

Murchison United NL said it no longer has any liabilities,contingent or otherwise, and will be seeking to move quickly to use its dual listing structure and shareholder base to buy a new business and recapitalise. In a statement, the company said it has issued 25 mln shares at 2 cents each to raise 500,000 aud for working capital.



2nd August:

Murchison United NL said Glenn Featherby has been appointed as chairman of the group to implement a growth strategy designed to rebuild the company over the next few years.

He replaces Bruno Camarri who, along with managing director Paul Atherley, has resigned at the completion of a successful debt reduction programme which has seen the company retire over 60 mln aud of liabilities in a little over 2 years.

The company also said today that it is now in a position to acquire a new business, recapitalise and give shareholders an opportunity to restore value.

A number of projects are currently under review and these will be carefully
assessed in terms of their potential to create significant shareholder value,
the board said.

Other board changes announced today include the appointment of Mark Reilly as an executive director with immediate effect. Murchison also said Stacey Apostolou has resigned as company secretary and has been replaced by Joe Schiavi.

Featherby is finance director of AIM listed Regal Petroleum PLC which has enjoyed significant success since its listing in September 2002. Featherby is also a non-executive director of Canadian and AIM listed European Goldfields Ltd.

The new board said it expects to announce additional director appointments in the future as part of the overall growth strategy.

[noirprince] 31/8/2004 15:34

Purchased these shares a long time ago and got burnt big time.

What exactly are they up to these days??

[foofighter100] 25/8/2004 12:57

1M trades gone through 30 mins ago. Is this starting to warm up again??

[skipster] 11/8/2004 12:48

...........

[skipster] 18/7/2004 13:48

West Australian – 17th July 2004

Tinpot miner hopes to be tin rattling

Long-suffering Murchison United shareholders will vote next week on the last placement that will allow the company to finally clear its outstanding liabilities.

But we also hear that managing director Paul Atherley - who is now dabbling with Leyshon Resources - will also formally chuck in the towel. A new board and management, including some successful names out of London, will apparently be revealed.

Shareholders in Murchison have taken an absolute bath, but Atherley did deliver on his promise to clean up the corporate mess, which started in mid-2002 when a deal to buy Rio Tinto's half stake in the big Neves Corvo copper mine was blocked by the Portuguese Government.

Following that, the tin price tanked, leaving an awful hedge position and the Renison Bell subsidiary in administration.

In a twist, the Neves Corvo mines went on to be sold to a Canadian junior called EuroZinc in a very similar deal to the one Murchison proposed.

EuroZinc has replicated the success Murchison had hoped for, with its shares surging from C8¢ (8.4¢) to C79¢ in the past 12 months.

[karzy] 18/7/2004 11:33

Story running on www.thewest.com.au (herd on the terrace), might be of interest.

[rachubb] 16/7/2004 22:59

company details financial details www.armshare.com


Murchison United NL
Report updated: 1st June 2004
Tin miner Murchison was an unfamiliar sight when alighting on AIM, but not entirely so; its having just disposed of a copper mine in Mount Cuthbert had a familiar ring, familiar to investors in Brancote, once AIM-quoted too that was.

In addition to that fiasco, the vagaries of the international commodity market are such that pin-ball like Murchison fairly crashed around - Zambian copper here, Indonesian coal there - before buying the Tasmanian Renison Bell tin mine in 1998 for A$40 million in summer of 1998.

Astute financial handling was claimed as having dealt with A$33 million of the obligation thereafter; and despite "no encouragement whatsoever" from the tin price, a vigorous approach to the problems to productivity seemed to be working wonders on the ground. Forget the previous figures in the table was the cry; A$45 million of tin sales in the half year to December 1999 produced A$12 million before taxation and Murchison expected to do better in 2000. Furthermore, production had been taken on on long-term contract and the Tasmanian Government was to assist the owners to assess the state of the reserves with a view to extending the life of the mine.

The AIM quotation was obtained in June 2000 when 15 million shares placed at 30p raised £4 million. The object was to allow Murchison to diversify. A July 2000 statement covering the quarter to June 2000 said that the company would double last year's EBIT of A$11.7 million. In the event A$95 million of sales produced operating profits of A$19 million, equivalent to 12p per share.

And the December 2000 interim report? Sales of A$37 million, down partly because of the Mount Cuthbert episode; but the disposal of that would net out A$5 million, which "would help the company to be debt free shortly". But lower production at Renison Bell had chopped pre-tax profits in half, and this was followed by a significant reduction of the workforce, the latter being announced in May 2001.

The preliminary figures for June 2001 showed that this time round A$90 million of sales generated a A$30 million loss. A careful hunt through the less-than-user-friendly report uncovered the information that a 14% reduction in the spot price for tin, redundancy cost of A$3 million, A$3 million in foreign exchange losses, and a A$30 million write-down in the carrying value of the Renison Bell assets had provided the jollies this year.

The shares sailed serenely on still capitalising the company at £25 million, which only went to show that lack of knowledge in the commodities business, or lack of familiarity with the Antipodes, could easily make inexperienced investors make bad decisions based as they would be of course, on false assumptions. Or not, for ignoring all the shenanigans the mine still turned in a A$14 million operating profit.

In October 2001 life got complicated. In conjunction with Outokumpu Oyj, a Finnish multinational metals and technology group, Murchison placed a bid to acquire Rio Tinto PLC's 49% interest in a Spanish mining company, Somincor (Sociedade Mineira de Neves Corvo). Somincor's Neves Corvo mine is one of the world's highest grade copper mines. The US$81 million acquisition was to be satisfied through a combination of a debt facility from Standard Bank London, a deferred consideration facility from Rio Tinto, and an equity raising.

Completion of the acquisition was conditional on the purchase of a further 17% in Somincor from EDM (Empresa Desenvolvimento Mineiro). 58% of the combined interest to be owned by Murchison and 8% by Outokumpu. Both companies were to work together to evaluate the development of zinc at the Neves Corvo mine.

Trading of the shares on AIM was temporarily suspended, and seemingly to the chagrin of the company, would not be traded again until the full details of the transaction were known, despite the fact that there was no hindrance to trading on the Australian Stock Exchange. In February 2002 £1.5 million was raised at 30p, and in March, Murchison, without any obvious perturbation, reported interim revenues to December 2001 of A$18 million against A$42 million, and a pre-tax A$12 million loss against a A$7 million profit in December 2000. The cash cost of Renison Bell's tin was A$6,600 per tonne, and tin prices had fallen to US$3.35 per tonne - or in English (that being permitted) about the Australian company's cost price. However, it was a bit of political trouble in Indonesia that was said to have caused the price to plummet; that was being brought under control it was said; a number of initiatives at Renison Bell, including the restructuring of that company's hedging facility had left it "more strongly placed than ever" when the tin price recovered to the expected US$5,000 per tonne. So that was all right. Unless Renison Bell was sold of course which it might be - apparently.

And later, the Renison Bell was well and truly rung, Murchison announcing the disposal of the business for A$10 million plus shares, up to a 15% holding in another company, Sirocco. Murchison was also generate future royalty payments if the tin price went over US$4,000 per tonne.

The board pointed out that the A$43 million which it paid for Renison Bell had almost almost all been borrowed, and was almost all now repaid. It was also at pains to indicate that it wanted to clear the decks for Neves Corvo. There was a passing reference to the problems which the aforementioned hedging arrangements had caused, and to be very frank, it was either not clear from the published announcements exactly what the implications of this might be, an alternative possibility being that the writer failed to understand the matter.

Returning from suspension, the company brandished underwritten placing documents for A$64 million (about £22 million). The statement which announced the funding was much clearer this time about the hedging problem, the US$3.75 million monthly payments to October 2003 due under the agreement having been deferred, and to be extinguished in total on the sale of Renison Bell. If for some reason this planned disposal did not crystallise, Murchison would be dependent on continued support of its bankers until the tin price and/or exchange rates made mining profitable again.

United seemed more proficient at scoring own goals than doing any damage in the opponent's half of the field, as a near halved share price on restoration of the quote testified. But that shock was as nothing to the July announcement that the shares had been suspended again as the A$64 million capital-raising issue fell to the ground, the necessary regulatory approvals not having been obtained. The post-suspension share price valued the entire entity at just £2 million. That figure had climbed to £2.6 million, just over 10% of the original flotation price, when Renison Bell was conditionally sold for around A$8.5 million and the bank agreed to defer the delivery of hedge contracts to October 2003. To help the company trade out, supplemented by a policy of planned growth by acquisition (!) A$5 million was to be raised from its shareholders. This was to be open to those with Australian addresses - at a price of less than 2p.

The latter was still inchoate as United trotted onto the field to table the June 2002 figures; an A$26 million loss. The sale of the mine was conditional on the money being raised by the putative buyer; and as the A$/US$ rate was 55c and only had to go to 59.5c for the troubled hedge positions to be closed, that was all right then one presumed.

The shares closed at 2.25p on the day, and then the board concentrated on what it arguably does best - raising capital, the final £1 million it was said being garnered on the last day of October 2002.

Come the last day of January 2003 and it transpires that Renison Bell has not been sold, but that a contracting company is now running the mine, meeting all of its own costs as a prior charge, but looking to Murchison for working capital support. Shareholders avid for good news will have to chew on the fact that net cash flows are to be divided equally with the mine operator, and that the hedge positions can now be closed without further liability to the company.

For the record, the December 2002 interim period saw the company lose $28 million, and come March 2003, an amendment to the aforementioned contractual agreement so that the contractor does not have to provide working capital - and so does not have any claim to any part of any surpluses.

What surpluses? In May 2003 Renison Bell operations were suspended, the closure expected to be for 6-8 weeks so that essential maintenance and recapitalisation could take place. In June the Bell rang for the end of the contest, as an administrator was appointed. And now it was hoped that the mine was to be sold and that something will be available to be the unsecured creditors, including Murchison.

For the record, the December 2003 interim period saw the company post a A$2.3 million loss. Also for the record, since the company asked interested parties to apply in writing for the 2003 full-year accounts, we decided that we were not interested.

By June 2004 the company raised A$500,000 and proclaimed itself a clean shell.
Research Standing
A good example of the risks of investing in things that you might not know anything about.

[tessybear] 14/7/2004 21:01

Got mine through Abbey National. Need to have the regular trader account. They are dual registered. Make sure it,s a nominee account . Was quite expensive recently changed , now lots of plus's and free phone line. Easy to join up.

[tessybear] 14/7/2004 21:01

Got mine through Abbey National. Need to have the regular trader account. They are dual registered. Make sure it,s a nominee account . Was quite expensive recently changed , now lots of plus's and free phone line. Easy to join up.

[skipster] 14/7/2004 19:47

T D WATERHOUSE?

[trading blue] 14/7/2004 17:54

Lloyds dont trade them either.

[rambutan2] 14/7/2004 17:01

i hold my from better times.

[springbok] 14/7/2004 16:56

Anyone tried to buy these through Comdirect?

[springbok] 14/7/2004 14:15

How do you buy these shares? When I tried to buy a few through COmdirect they said that they don't deal in them!

[rambutan2] 14/7/2004 11:35

would have thought a large placing a cert on anything of any quality.

[springbok] 14/7/2004 10:34

Only worry is the fact that a large placing might take place on any RTO?

Pity Dell hasn't looked at this one - he would give the "bottom line" analysis!

[springbok] 14/7/2004 10:32

To me this looks like a better bet then REV - huge cash reserves - right sector for an emerging mining company that wants to get on AIM or the LSE

[springbok] 14/7/2004 10:29

What are we waiting for here now? Noticed that there's been a few profit takers from the rise and yet the price is holding very steady

[tessybear] 13/7/2004 09:25

Why are sellers getting paid more than the bid price and indeed it seems the larger the amount the higher the price, Anyone explain this to me . Also any news out there . I see some selling going on but wonder if that will trigger some new buyers.

[skipster] 12/7/2004 09:39

"MINING SECTOR - Russian mining group SUAL is thought to have abandoned its
flotation plans and is looking to reverse into a quoted mining company (Sunday
Times)"

[skipster] 09/7/2004 15:15

Back in late January Atherley was talking about reversing something interesting into the company and that it won't be too dilutive. Sounds like it may be very soon now. I quite like the Chinese Gold idea.

[gismo] 09/7/2004 15:02

Thanks for that Skipster, now where's the piggy bank?

[skipster] 09/7/2004 15:01

Up 100% in the last week.

From June 1st announcement:

"As a result, the Company no longer has any liabilities, contingent or otherwise, and will be seeking to move quickly to utilise its dual listing structure and shareholder base to acquire a new business, recapitalise the Company and give shareholders an opportunity to restore value."

Apparantly Paul Atherley is set to inject something interesting into MUU and pretty soon.

[gismo] 09/7/2004 14:57

Juat found this one, any good reason to buy, you all sound as if you've lost loads?

[skipster] 09/7/2004 14:34

Make that 16% and rising!